Abstract
Development of green infrastructures (renewable energy plants and transmission networks) is urgently needed if significant reductions of greenhouse gas emissions are to be accomplished in the next few decades. But the huge financial investments required by these infrastructures will not be undertaken without a well-designed regulatory framework. This paper argues that barriers to the implementation of such a framework can best be understood by drawing analogies to the Law and Economics literature on anticommons. Although situations of ownership anticommons (many owners with veto rights) and regulatory anticommons (many regulators with veto rights) display some differences from the point of view of the preferences and the coordination costs, it is submitted that this analytic framework can be employed to assess and criticize recent EU and US proposals which try to improve planning and siting procedures for cross-border green infrastructures. The literature on anticommons also suggests that effective remedies to suboptimal resource use are directly dependent on the design of the coordination mechanisms among all the regulatory levels.
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Notes
The declaration by Stephan Kohler, Chairman of the Deutsche Energie-Agentur GmbH (DENA), can be read at http://www.germanenergyblog.org, post of 19 October 2010. A few weeks later, this declaration was supported by the data published in the DENA Grid Study II (November 2010), showing that the need for new power lines by 2015 had been satisfied only to a limited extent and that the new base scenario for 2020 asked for 3,600 km of new extra high voltage lines, at a cost of €9.7 billion. In early 2011 Germany adopted an amendment of the Power Grid Expansion Act (EnLAG), to simplify and accelerate planning and authorization procedures in four underground cable pilot projects, and in July 2011 the Grid Expansion Acceleration Act (NABEG), delegating the Federal Network Agency to determine the regional compatibility of internal and cross-border extra-high voltage lines.
I include in this definition both RES plants (e.g. onshore and offshore wind farms, small and large solar plants) and transmission grids. A different definition of green infrastructure is provided by the European Commission in its biodiversity strategy and in the policies aimed at maintaining and restoring ecosystem services: see http://ec.europa.eu/environment/nature/ecosystems/index_en.htm.
According to the International Energy Agency (2011, p. 2), “for every $1 of investment avoided in the power sector before 2020 an additional $4.3 would need to be spent after 2020 to compensate for the increased emissions.”
For many other categories of infrastructure investments, strategic misrepresentation and psychological biases contribute to underestimation of costs and overestimation of benefits (Flyvbjerg 2009). The same problems plague investment in green infrastructures, but I suggest that the difficult assessment of costs and benefits in climate change policies adds another layer of complexity for the choice of governance structures.
On conflicts between neighbours for the use of wind and solar plants see, e.g., Rule (2010); Bronin (2009). I will not discuss these problems here, nor will touch upon the related problem of public opposition to infrastructures (see, e.g., Devine-Wright 2010). Instead, the paper focuses on coordination problems among regulators.
In the same vein, Kosnik (2010), p. 13–14, proposes a model in which the regulators have overlapping authority over the same set of goals. However, she does not rule out the possibility of extending the model to include regulators with multiple preferences. Overlapping jurisdictions are also assumed by Parisi et al. (2006b).
In real-life land deals, too, it is often difficult to distinguish strategic holdouts from other psychological motivations: see Parchomovsky and Siegelman (2004).
At least six other authorities are usually “involved” in the authorization process for offshore wind turbine projects (Danish Energy Authority 2009). For descriptions of Danish authorization procedures see also the national report on Denmark in Ecorys (2010); Pettersson et al. (2010); Sperling et al. (2010).
While the Planning Act conceived of the IPC as an independent non-governmental body, the Localism Act 2011 turned the task of examining applications to the Planning Inspectorate within the UK Department of Communities and Local Government, while the final decision on the infrastructure was turned to the Secretary of State. The Localism Act also introduced other changes to the authorization procedure.
However, the defence is available only to the extent that the nuisance is the inevitable consequence of what has been authorised. Moreover, the defence does not extinguish the local authority’s duties to inspect its area and take reasonable steps to investigate complaints of statutory nuisance and to serve an abatement notice where satisfied of its existence, likely occurrence or recurrence. The defence is not intended to extend to proceedings where the matter is prejudicial to health and not a nuisance. Finally, the IPC can impose requirements to mitigate or limit nuisances. See DECC (2011, p. 67f., 89).
The single authorization procedure for RES plants was adopted by art. 12 of the legislative decree 29 December 2003, n. 387 (implementing the first RES directive). It refers to the procedure for the COP regulated by art. 14ff. law 7 August 1990, n. 241. See also the guidelines on the regional authorization of RES plants adopted with ministerial decree of 10 September 2010. Art. 5 of the legislative decree 3 March 2011, n. 28 (implementing the second RES directive) introduced shorter time limits for the single authorization procedure.
See art. 1-sexies law 27 October 2003, n. 290; Italian Constitutional Court, decision of 14 October 2005, n. 383, Giur. Cost., 2005, 3640. A description of the procedure can be found in Realisegrid (2010, p. 35–45).
New provisions imposing a duty to coordinate the authorization procedure for the RES plant and its connection to the network were introduced by art. 4.4 and 16.3 legislative decree n. 28/11. However, the latter decree did not address the problem of virtual saturation of network transport capacity, which is due to the large number of requests for connecting RES plants. Even though such plants will not be authorized or completed, the reservations block entry by other operators. To discourage opportunistic reservations of transport capacity, the Italian energy regulator (Aeeg) has proposed to introduce a fee for the reservation of network capacity, with refund possible within 2 years, or to link capacity reservations to the grant of the authorization for the plant (Aeeg consultation paper DCO 37/11 of 15 September 2011).
For other proposals see Andoura et al. (2010) (creation of independent regional executive energy agencies, exclusively competent for the development of cross-border networks); Boot and van Bree (2010) (ACER could be delegated the task of promoting the development of a European zero carbon infrastructure).
In the American Clean Energy and Security Act 2009 (the Waxman-Markey bill), H.R. 2454, passed by the House of Representatives on 26 June 2009, sec. 151 asks the FERC to issue national planning principles. Adhesion to the principles is voluntary. Plans inconsistent with national principles can be returned for further consideration. New and extended backstop authority (replacing state authority in case of inaction) is granted to the FERC only in the Western Interconnection. Different solutions on siting and backstop authority are proposed in other five bills pending in the US Senate and House of Representatives (S. 539, S. 774, S. 807, S. 1462 and H.R. 2211). For critical discussions see Brown and Rossi (2010, p. 741–748) (observing that many legal barriers to new transmission infrastructure are not addressed by pending federal proposals); Rossi (2009, p. 1039ff.) (criticizing expansion of federal authority on transmission siting); Noor (2009, p. 163–166) (describing federal proposals on transmission siting); Benedetti (2009, p. 274–276) (arguing in favour of preserving state input and authority in the grid planning and siting processes).
The nine principles are: (1) coordination, (2) openness, (3) transparency, (4) information exchange, (5) comparability, (6) dispute resolution, (7) regional participation, (8) economic planning studies, (9) cost allocation for new projects.
Lurking in the background of this debate are contrasting visions for the twenty first century grid. In 2009 ten East Coast governors and five West governors publicly opposed the idea of the transmission superhighway (on which see AWEA and Solar Energy Industries Association 2009), proposing instead to study alternatives to transmission and to support local development of RES.
W.W. Buzbee (2003) argues that overlapping regulatory jurisdiction may lead to the opposite effect of underregulation because of blame and problem attribution, diluted credit claims, information costs and status quo preservation incentives. However, his analysis mainly focuses on issues where the primacy of one regulator has not yet been established or jurisdictional boundaries are blurred. In any case, the second principle described in the text should address this concern.
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Bellantuono, G. The regulatory anticommons of green infrastructures. Eur J Law Econ 37, 325–354 (2014). https://doi.org/10.1007/s10657-012-9298-3
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DOI: https://doi.org/10.1007/s10657-012-9298-3